The market is up 16 in-line with the 26 point rise predicted by the SFE Futures this morning. A pretty flat start to the week with not a lot significant news around. Resources struggling, Property Trusts and Banks doing well.

The Dow was up 53. Up 71 at best. Down 66 at worst. Market up 4 sessions on the trot. US financials up 0.3% maintaining last week’s gains. Obama announced a $730m package to provide federal lending to small business owners. US healthcare stocks outperform — up 3.3%. Energy down the most — fell 0.7% on the lower oil price. OPEC decided against a production cut on Sunday — didn’t want to make the global recession any worse than it already is. The US Trade deficit fell for a record sixth month on the trot in January thanks to falling demand for imports. BHP and RIO both up in ADR form overnight — 2.30% and 0.8% respectively. Metals up. Oil up. Gold up. Bonds down. A$ down. Japan and China both showed they are willing to create fresh stimulus packages — Nikkei up 5.2%. Hang Seng up 4.4%.

FOMC Meeting statement on Wednesday 2.15pm their time (we’ll wake up to it on Thursday) — rates have already been cut to zero … last time they retained the 0-0.25% target rate. Main take away was that rates were expected to stay low for some time and although they expect a gradual economic recovery later this year the risks to that expectation are significant.

Asciano (AIO) up 23% on takeover approaches for various parts of the business (Patrick or Pacific National). They hope to announce a transaction by the end of June. There have been rumours of a private equity bid at 100c. Up 17c to 80c. We are a long way from the 440c they were offered by private equity at the peak of the market.

  • The government have extended its review of the RIO bid for stock and assets from Chinalco. The delay is not good for the share price … uncertainty never is and it suggests that it is not a clear cut easy decision.
  • Arrow Energy’s (AOE) subsidiary Arrow Energy International has bought a stake in Far East Energy Corp.
  • Atlas Iron (AGO) has entered into two long term off-take agreements with two Chinese steel mills.
  • Computershare (CPU) has bought Kutzman Carson Consultants for US$85m and 2.45m shares — cost may be higher depending on earnings targets being met in the next three years.
  • Newcrest (NCM) has sold $59m worth of new fully paid shares at 2700c a share.
  • Energy Resources of Australia (ERA) has applied for government approval for a heap leach expansion project at the Ranger uranium mine.
  • Kagara Zinc (KZL) has announced a significant update to their Mungana Gold resources.
  • International Petroleum Investment Corporation has become the largest shareholder of Oil Search (OSH) after the completion of its Exchangeable Bond transaction with the PNG government.
  • Campbell Brothers (CPB) doing well after Perpetual upped its stake in it.
  • West Australian Newspapers (WAN) has announced Brett McCarthy as its new editor.

Other…

  • GSJBWere upgrade Crown (CWN) to BUY from Hold after Friday’s announcement saying they would rewrite their $1.77bn agreement to buy privately held US Cannery Casino Resorts.
  • Macquarie Group keep UNDERPERFORM on Orica (ORI) with a 1521c price target. “The full impact of the resources downturn is still playing out and we expect a larger negative impact on ORI’s earnings to emerge in the 2H.”
  • Boart Longyear is confident it will be able to either refinance or extend the repayments date on $US85m of debt due in April next year. Price up 20%.
  • Goldman Sachs and Morgan Stanley release their earnings results – US Financials were up 32% last week as Citigroup and Morgan Stanley and a number of others declared they were profitable so far this year.
  • Bernanke comment: “I have every confidence that this economy will recover, and recover in a strong and sustained way….recovery is not going to happen until the financial markets and the banks are stabilized”.
  • ABN AMRO has changed its name to RBS Equities in Australia (ABN AMRO was taken over by a consortium led by the Royal Bank of Scotland) near the top of the market for $100bn.
  • Hartleys has a BUY recommendation and a 132c valuation on Red Fork Energy (RFE) after it’s tripled its estimate of flow rates from its East Oklahoma project. Price now 34c up from 18c this month.

The Dow Jones futures suggest a 44 point fall on Wall Street tonight.

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

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